New research shows that China’s massive Belt and Road Initiative (BRI) is in danger of losing pace as opposition in targeted nations grows and debts accumulate, clearing the path for alternative projects to force Beijing out, according a new report released on Wednesday.
China’s President Xi Jinping established the Belt and Road Initiative (BRI) in 2013, with the goal of leveraging China’s strengths in financing and infrastructure construction to “create a broad community of shared interests” throughout Asia, Africa, and Latin America.
A study by AidData, a research lab at the College of William and Mary in the United States, found that Xi’s “project of the century” is now encountering substantial obstacles and backlash in other countries, particularly in the Middle East.
As one of the study’s authors, Brad Parks, observed, “A rising number of officials in low- and middle-income countries are putting high-profile BRI projects on hold because of worries about overpricing, corruption, and debt sustainability.”
According to AidData, projects worth $11.58 billion in Malaysia have been cancelled between 2013 and 2021, with about $1.5 billion in Kazakhstan and more than a $1 billion in Bolivia also being cancelled.
A statement from China’s foreign ministry stated that “not all loans are unsustainable,” and that the Belt and Road Initiative (BRI) had “consistently honoured principles of shared consultation, shared contributions, and shared benefits” since it was established.
According to the report, many partner countries have stated that the project has made a good contribution to local economic development.
As He Lingxiao, spokesperson for the China-led Asian Infrastructure Investment Bank, which is intimately associated with the Belt and Road Initiative, put it, the “overall principles of the BRI are sound.”
We push for high international standards in the way these ideas are put into operational realities, he explained.
The AidData study looked at 13,427 China-backed projects in 165 countries over 18 years, with a total value of $843 billion. It found that Beijing’s annual international development finance commitments are now double those of the United States, and that Beijing’s annual international development finance commitments are now double those of the United States.
However, according to Parks, significant shifts in public opinion make it difficult for participating countries to maintain strong ties with Beijing.
A growing number of China-backed projects have been suspended or cancelled since the BRI’s inception in 2013, according to the report, with indications of “buyer’s remorse” in nations as diverse as Kazakhstan, Costa Rica, and Cameroon.
Credit risks have also increased, with exposure to Chinese debt now reaching 10% of gross domestic product (GDP) in numerous low- and middle-income nations, as well as in many high-income countries.
According to the results of the survey, corruption, labour violations, environmental damage, and public protests were all issues that plagued 35% of the Belt and Road initiatives.
Earlier this year, the United States unveiled a competing G7 programme known as Build Back Better World (B3W), which will provide financial assistance to developing countries in order for them to improve their infrastructure.
The introduction of B3W will broaden the range of options available in the infrastructure financing sector, which could result in some high-profile BRI defections, according to Parks.
An array of corporate and public institutions, including the Ford Foundation and the United States Agency for International Development (USAID), contributed to AidData’s research (USAID).
This organisation claims that its research is independent and transparent, and is neither guided or determined by the organisations that support it.